COMMON BIASES IN

PERFORMANCE
MANAGEMENT AND
METHODS TO OVER
RULE THEM

What is Performance
It is the process that helps for the effective management of the
individuals Management?
and teams to achieve the organizational goals.

Performance Assessment

Performance Assessment is generally subjective in nature. So managers

intentionally or unintentionally make mistakes or exhibit biases.

Biases happened during performance assessment affects other decisions

such as pay and promotion.

COMMON BIASES IN
PERFORMANCE MANAGEMEN
Halo Effect
T
Horn Effect

First Impression or Primary Effect

Recency Effect
Stereotyping / Personal Biases
Spill Over Effect
Lenience, Stiffness and Central tendency

HALO EFFECT
Type of Cognitive Bias ( systematic error in thinking that effects the
decisions we make).
The overall impression of a person influences how we feel about their
character
Rater perceives one positive characteristic about an employee or their
performance and allows it to influence all factors or areas in a
performance evaluation.
Leads to a generally favorable or overall high performance rating

Examples:
Rating attractive people more favorably in character than those who are
less attractive.
Employee may be punctual and have few or no absences and manager

HORN EFFECT
Tendency to allow ones judgment of a person to be influenced by an
unfavorable impression
If our impression about a person is negative, we tend to ignore their
positive characteristics and concentrate only on the negative ones.
Personality conflicts can increase the probability of the Horn effect.
Rater perceives one negative characteristic about an employee or
their performance and allows it to influence all factors or areas in a
performance evaluation
If a manager dislikes an employee could lead to an overall poor
evaluation or appraisal.
Examples:

Overcoming the Halo and Horn

Effect
Accountability means that there are consequences that depend on
some aspect of the ratings or judgments given

Consider each factor independently of all other factors. An employees

behavior usually is not the same on all skills that the rating scales
measure. Employees have both weaknesses and strengths
Look back at employees performance through out the year and be
able to justify and give real examples of where an employee excelled
or lacked in a certain area being rated.
Involve the input of others in the evaluation.

RECENCY EFFECT
Occurs when recent behavior or performance carries too much weight
in evaluating an employees performance.
Most recent occurrences are on the forefront of a managers mind
whether good or bad and heavily influences or heavily colors
managers perception of an employee.
Does not take into consideration the whole rating period.
Can be an advantage or a disadvantage to the employee.
Manager may tend to forget or minimize behavior that occurred
earlier in the rating period resulting in an inaccurate evaluation
Examples:

Overcoming the Recency Effect

Critical Incident Documentation
Manager compiles a list of outstanding or unsatisfactory examples of
a employees performance through out the rating period
Examples are used to rate each area of an employees performance so
ratings are determined using objective data
During appraisal interview manager can site specific examples and
incidents to illustrate why a certain rating was given.

LENEINCE, STIFFNESS, AND CENTRAL TENDENCY

Lenience Tendency - rating all employees highly or favorably regardless
of actual performance. Tends to lead to:
No differentiation between employees
Stiffness Tendency
Central Tendency rater avoids making extreme judgments of
employees performance resulting in all employees being rated in the
middle of the rating scale
This can happen when a manager is uncomfortable with conflict and
giving negative reviews
No room for personal growth or performance improvement since no
strengths or weaknesses are identified
Examples -

Overcoming the Lenience,

Stiffness, and Central Tendency
Educating managers in the different kinds of performance Biass
Educating managers and allowing them to understand the
constructive purposes of performance appraisals
Enabling managers to acquire effective skills in giving negative
feedback

STEROTYPING/PERSONAL BIASES
The way a supervisor feels about each of the individuals working
under him - whether he likes or dislikes them has an effect on their
performance ratings
Personal Bias can develop from information obtained from social
background, other colleges or peers, or different faiths and thinking .
Personal friends of managers can better ratings than their
performance justifies.
Rating employees lower than they deserve when there is a
personality, mannerism, or style conflict.
Stereotyping when managers generalize about employees
performance based on a group. Grouping can be age-wise, sex wise,
experience-wise, region-wise, education wise and so on
Example - managers may generalize or stereotype saying that all young
employees do not take ownership of their work, or that freshers hired
from a particular university have great technical skills and so on.

FIRST IMPRESSION OR PRIMARY

EFFECT
The tendency to let a first impression of performance carry too much
weight in the evaluation of performance over an entire period.
If our first impression about a person is positive, we tend to ignore
their negative characteristics and concentrate only on the positive
ones and vice versa
Example a new employee performing at high levels during the
probationary period and then maybe losing some of that initial
momentum during the rest of the rating period. Overall impression is
highly positive even when performance declines.

Over Ruling Biases

Management by Objectives Involves the manager and employee working
together to come up with performance objectives and goals for the next
appraisal period. Evaluate by the degree of goal achievement. Have interim
disscusions where any potential problems or conflicts in performance can be
dicsussed or clarified
Critical Incident Documentation - both the employees and managers can keep
a online journal of key events throughout the year.This will come handy
during the performance evaluation.
Input of Others peer reviews, 360 reviews. Feedback from peers or other
superiors who worked with the individual can provide insights on the
performance which the manager is not able to see due to his biases.
Training and awareness building: Before each performance evaluation cycle,
managers should be subjected to a short eLearning course or face to face
discussion in small groups. This should cover the importance of the
performance management process, the best way to evaluate performance
and how to avoid biases.

How to make Performance Assessment

Objective?
Assigning

SMART

goals

to

individuals

(SMART

measurable, achievable, Realistic and time bound)

Having descriptors for the rating scale
Regular recording of journals
Regular feedback

stands

for

specific,

Conclusio
n

Biased performance assessment by a manager can result in a strained

working relationship for the employee.
It can result in low morale and poor job satisfaction from the employee side
So it is the responsibility of the supervisors, managers and human resource
staff to eliminate these biases

LENIENT TENDENCY/CENTRAL
TENDENCY BIAS

Central tendency

Lenient Tendency
1. Results in inflated and inaccurate

2. All employees fall in the average

ratings
2. Areas

needed

for

performance

3. Undeserving candidates get the

and

between
employees

fails
the
in

performance level

to

distinguish
subordinate
terms

rating range.
3. Undeserving candidates get the

improvement remains ignored

credit

1. Inaccurate rating

of

credit

whereas

deserving

candidates fails to get the credit.

Fails to distinguish employees in
terms of performance level

Why certain managers go for lenient and

central biased ratings?
Strong manager employee relationship
Minimize time and effort
Avoid confrontation
Prevent personal damage to relationships
Agreeable personality
Lack of preparation

Assessment fairness from employee perspective

Employees care about:
Compensation they receive
Rating compared to their
expectations
Rating of others

Effect of centrality bias on the perception

of employees

Above average employees become less motivated

Below average employees think the performance rating
is fair.

Effect of leniency bias on the perception

of employees
Employees perceive leniency bias positively

Effect of centrality bias on pay and

performance
Creates a disproportionate pay to performance ratio
Reduces incentives for both above below average
performers

Effect of leniency bias on pay and

performance
Reduces performance
Reduce employee incentive

References
Lai, L., & Babcock, L. C. (2012). Asian Americans and workplace discrimination: The
interplay between sex of evaluators and the perception of social skills. Journal of
Organizational Behavior J. Organiz. Behav., 34(3), 310-326.
Bol, J. C. (2011). The Determinants and Performance Effects of Managers' Performance
Evaluation Biases. The Accounting Review, 86(5), 1549-1575.

STIFFNESS TENDENCY
BIASof Lenient tendency bias
This is just opposite
Managers always feel there is more room for improvement.
Managers tend to set very high standards while evaluating
performance.
Result in de-motivating even good performers
No distinction between high, average and low performers
Mostly affects good performers

STEREOTYPING BIAS
When people are categorized based on some feature that
they have.
This
type of race,
bias is
harmful
to or
an religion.
organization
Most
commonly
gender,
age
Can affect positively or negatively
Results in overestimation or under estimation of employees
Women are more likely to be the victims gender based bias
Negatively affected victims of stereotyping bias lose morale
and motivation
Can result in miscommunication between managers and
subordinates and results in low productivity
Lack of promotion

Where do stereotyping bias comes

from?
Stereotype are formed in human beings naturally

It is a human tendency to categorize people into

groups
They come from family, peers, media, society and
experience